Stock exchange takes first drop in several months
On Wednesday, the stock market took a drop for the first time in several months.
DOW dropped 372 points, the lowest drop since September of 2016. The drop comes off the heels of a recent, steady increase in the market. Financial advisors said the reason for the change has everything to do with politics.
“The buildup that we’ve seen over the past four months have been because of the promises Trump made in campaigns and then as president,” said Alan Jenkins, a financial advisor with University Financial Group in Pocatello.
“With Trump getting elected, everybody kind of invested in Trump,” said Jackson Wood, a financial advisor with Carol Holm Financial in Blackfoot. “They wanted the idea of healthcare reform, tax reform, decrease in regulations and they kind of went all in.”
“a lot of what you saw today was kind of a disillusion, I think, of what Trump has been leading up to,” Jenkins said.
“I think it can be summed as the Trump trade is kind of unwinding,” Wood said. “Impeachment odds of Donald Trump spiked to 32 percent today, so that hasn’t ever before been seen. So fear is starting to return to the market and we’re starting to see kind of the hope unwind.”
Wood said those who would likely be most affected by the drop are those with a short term horizon investment. That means, those who can’t afford to lose money now in order to hopefully gain later. In other words, those looking for a quick investment who need money quicker.
Both financial advisors said everyone’s individual investments are different, so it’s hard to say the impact this would have widespread. But looking at the overall market, as well as decades of past trends in the stock market, advisors said they don’t necessarily see a cause for worry with the drop at this point.
“I myself didn’t really get concerned when I saw the drop,” Jenkins said. “Yeah, it’s the largest drop we’ve seen since September last year but the market’s been building up. We’re at the highest buildup we’ve been in history.”
“Since the election, Nov. 8, the market has gone straight up,” Wood said. “Today the market had its worst day in nine months. When you put it into perspective though, we’re still trading at all time highs.”
“I honestly believe that this is your standard up and down,” Jenkins said.
Jenkins said the best advice any financial advisor can offer is to visit your own local advisor and look at your personal investments. If anyone is worried about the effects of the stock market change, or about when to invest, consult a local financial group. Both Carol Holm and University Financial said if anyone needs a financial advisor, the door is always open.
